Correlation Between Just Eat and Signify NV

Can any of the company-specific risk be diversified away by investing in both Just Eat and Signify NV at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Just Eat and Signify NV into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Just Eat Takeaway and Signify NV, you can compare the effects of market volatilities on Just Eat and Signify NV and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Just Eat with a short position of Signify NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Just Eat and Signify NV.

Diversification Opportunities for Just Eat and Signify NV

-0.59

Correlation Coefficient

Just Eat  Signify NV

Excellent diversification

The 3 months correlation between Just and Signify is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Just Eat Takeaway and Signify NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signify NV and Just Eat is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Just Eat Takeaway are associated (or correlated) with Signify NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signify NV has no effect on the direction of Just Eat i.e., Just Eat and Signify NV go up and down completely randomly.

Pair Corralation between Just Eat and Signify NV

Assuming the 90 days trading horizon Just Eat Takeaway is expected to under-perform the Signify NV. In addition to that, Just Eat is 1.46 times more volatile than Signify NV. It trades about -0.02 of its total potential returns per unit of risk. Signify NV is currently generating about -0.02 per unit of volatility. If you would invest  2,983  in Signify NV on October 7, 2024 and sell it today you would lose (857.00) from holding Signify NV or give up 28.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Just Eat Takeaway  vs.  Signify NV

Just Eat Takeaway

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Just Eat Takeaway has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Just Eat is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Signify NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Signify NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Signify NV is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Just Eat and Signify NV

The main advantage of trading using opposite Just Eat and Signify NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Just Eat position performs unexpectedly, Signify NV can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Signify NV will offset losses from the drop in Signify NV's long position.

The idea behind Just Eat Takeaway and Signify NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.